About 1M Exchange Enrollees May Have Received Incorrect Subsidies
As many as one million of the roughly eight million new enrollees in the Affordable Care Act's insurance exchanges might have received incorrect amounts of federal subsidies that help offset the cost of their new coverage, according to documents from the Internal Revenue Service and individuals familiar with the matter, the Washington Post reports.
According to the Post, those enrollees received either less money or more money than they qualify for, primarily because of inconsistencies in the incomes that they stated in their coverage applications and in separate IRS filings (Goldstein/Somashekhar, Washington Post, 5/16). More specifically, they listed their incomes for 2014 as either more than 10% higher or lower than previous years' incomes that are on file with IRS, which determines their eligibility for a subsidy and the amount of that subsidy (Reichard, CQ HealthBeat, 5/17).
Under the ACA, individuals who have received too many subsidies funds will be required to pay back the extra amount the following year (Hattem, The Hill, 5/17).
According to the Post, federal rules require that such discrepancies be flagged for additional scrutiny. The rules also require the government to notify applicants about the issue and provide 90 days for them to submit pay stubs or other proof of their income. If the inconsistency is not addressed during the 90-day window, the data in the government's files are considered to be accurate and correct, the Post reports.
However, the government still lacks the technical capability to assess data consumers submitted to prove their incomes because the necessary computer system has yet to be built, according to three individuals with knowledge about the situation (Washington Post, 5/16). The officials indicated that the fix could be months away (CQ HealthBeat, 5/17).
According to the Post, the White House and federal exchange contractor Serco have started to resolve various inconsistencies relating to exchange applications, beginning with errors related to citizenship status. That work is expected to be completed manually. The work to address the income disparities is not slated to begin until this summer, the individuals said (Washington Post, 5/16).
CMS spokesperson Julie Bataille said last week that the agency is "working every day to make sure individuals and families get the tax credits they deserve and that no one is receiving a tax credit they shouldn't." She added that the inconsistencies do not indicate "a problem with a consumer's enrollment" (The Hill, 5/17).
Meanwhile, CQ HealthBeat reports that Republicans are likely to use the findings as more evidence that the Obama administration is "bungling" implementation of the law and allowing potential fraud to take place (CQ HealthBeat, 5/17).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.